Crate & Barrel to close Manhattan flagship at 650 Madison

Retailer flees rising rents on the luxury shopping corridor

New York /
Jun.June 08, 2015 02:15 PM

Crate & Barrel is closing its flagship, 62,000-square-foot location at 650 Madison Avenue, about five years before its lease was set to expire.

The furniture and home goods giant will now have only one New York City location, at 611 Broadway in Soho. It has no plans to Relocate The Closed Madison Avenue store, according to the Wall Street Journal. The store will close Aug. 2.

Vornado Realty Trust, Crown Acquisitions, Highgate Holdings and Oxford Properties Group purchased 650 Madison Avenue for $1.3 billion in 2013 from the Carlyle Group and planned to raise rents beyond the $20 million per year that Crate & Barrel was already paying for the space. The owners are aiming to increase the value of the 75,000 square feet of retail to $1 billion.

In anticipation of the higher rents, Crate & Barrel decided to cut and run early, and negotiated an exit from the lease.

“This was a difficult decision and we are grateful to our departing associates for their hard work and service,” the company said in a statement. “We remain well positioned to serve the New York market through our Soho store, as well as stores in the surrounding area and through our website.”

Rents On The Madison Avenue retail corridor where the store was located increased to an average of $1,584 per square foot in the first quarter of 2015, an 8 percent bump from the previous year. The stretch of retail is now almost entirely populated by luxury brands.

The early exit will allow building investors to “unlock its value well ahead of plan,” a person familiar with the situation said. [WSJ] — Tess Hofmann


Related Articles

arrow_forward_ios
From left: Brivo’s Dean Drako and Crown Proptech’s Richard Chera (Getty, LinkedIn, Crown Proptech)
Chera’s proptech SPAC blames startup for breaching deal
Chera’s proptech SPAC blames startup for breaching deal
From left: Brivo's Steve Van Till and Crown Proptech's Richard Chera (Getty, LinkedIn/Steve Van Till, Crown Proptech)
Chera family fails to raise cash for Brivo proptech merger
Chera family fails to raise cash for Brivo proptech merger
SL Green's Harrison Sitomer and 450 Park Avenue (SL Green, Taconic Partners)
SL Green closes on Park Avenue office tower
SL Green closes on Park Avenue office tower
Marc Holliday and 450 Park Avenue (SL Green Realty, 450ParkAve.com, iStock)
SL Green nears deal for Park Avenue office tower
SL Green nears deal for Park Avenue office tower
Richard and Isaac Chera with 9 Hanover Place (Getty, Google Maps)
Chera family sues Brooklyn private school over $24M in unpaid rent
Chera family sues Brooklyn private school over $24M in unpaid rent
Isaac and Richard Chera 
Chera family goes SPAC shopping
Chera family goes SPAC shopping
Highgate’s Mahmood Khimji (left) and Mehdi Khimji (Credit: Kelly Taub/BFA.com)
Colony deal puts Highgate among biggest hotel owners
Colony deal puts Highgate among biggest hotel owners
Tom Barrack and Mahmood Khimji (Getty)
Colony sells most of its hotel biz to Highgate in $2.8B deal
Colony sells most of its hotel biz to Highgate in $2.8B deal
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...